Moritz v. City of St. Paul , 52 Minn. 409 ( 1893 )

Dickinson, J.

This is an action to recover from the defendant city the sum of $513.60, which had been assessed and allowed as damages for a change of the grade of two streets upon which abutted the land with respect to which such damages were allowed.

In April, 1888, one Schroeder owned this land. At that time he mortgaged it to one Kirtland, and thereafter (July, 1888) he sold and conveyed it to Gehan. In proceedings for the foreclosure of the mortgage the land was sold February 19,1890; the mortgagee, Kirtland, being the purchaser, and the amount bid therefor being the full amount of the mortgage debt. No redemption’ was ever made, and, upon or after the expiration of the period for redemption, Kirtland sold and-conveyed the land to this plaintiff, transferring also to him the right of the former in respect to the money here sought to-be recovered.

Prior to the foreclosure sale, proceedings had been instituted for a-change of the grade of the streets; and the common council of the-city had adopted a resolution that the grade be changed, and had referred the matter to the board of public works, pursuant to the-charter, for an assessment of damages. The assessment was not-made by that board until March 12,1890, (after the foreclosure sale,) and it was not completed by confirmation until April 7, 1890.

Upon trial in the district court the plaintiff was held entitled to recover the damages which had been awarded for the change of grade.. The defendant appeals from an order refusing a new trial.

It is first contended on the part of the defendant that the interest of the mortgagee, Kirtland, in the property was not such as to entitle her or the plaintiff, who has succeeded to her rights, to recover the damages thus awarded. We hold to the contrary, and in accordance with the decision of the district court. The charter of the city does not permit any change of an established street grade to be con-, summated and take effect except upon the condition precedent of the making and confirmation of an assessment of the damages which may result therefrom, and it authorizes the common council to annul any order for a change of grade at any time prior to the confirmation of such assessment. Sp. Laws 1887, ch. 7, p. 366. Hence the resolution of the common council prior to the foreclosure sale, that the grade be changed, did not affect any change, ifor did it alter the situation of the property. No change of grade was effected, nor did it become certain that any change would be made, nor did the owner of the land, or any one interested therein, become entitled to receive the damages in question until the assessment had been confirmed, which was after the foreclosure sale. The mortgagee became the purchaser on foreclosure subject to the right of redemption, taking the property as it existed at that time, with the street grade still unchanged, and it being, moreover, uncertain whether any change would ever be made. She took the land in that situation, and when afterwards, upon the confirmation of the assessment of damages, the change of grade became effectual, the estate which she ■had purchased, and as she had purchased it, became then, not before, impaired or burdened to the extent that the change of grade would affect it. The damages assessed are not only to be here regarded as the measure of that impairment of the estate purchased', but they become a substitute for what was thus taken or appropriated by the public from such estate, and the mortgagee who had thus purchased was entitled to receive such damages; they being less than the amount of the mortgage debt. Our decision in Whitney v. Huntington, 34 Minn. 458, (26 N. W. Rep. 631,) is controlling upon this point.

It is further said, in defense, that under the charter the damages were assessed only in favor of the “owner” of the property, and that the mortgagee, after foreclosure sale, and before the expiration of the period for redemption, was not the owner. The assessment was not in terms made in favor of the owner. The special law above cited (section 3, tit. 3) provides for the assessment of the damages “to property occasioned by such alteration.” It contemplates, as seems apparent, the awarding* of damages for the entire injury to the property resulting from the change of grade; and while, in that part of the law which is referred to in section 4 as indicating the procedure for the making of the assessment, (title 1, p. 335, §7 et seq.,) the words “owner” and “owners” are used to designate the parties interested, and in whose favor the assessment is to be made, those words must be construed in a comprehensive sense, as including all persons having interests in the land, or who are entitled to the compensation to be awarded for the injury to the property. Parks v. City of Boston, 15 Pick. 198; Watson v. New York Cent. R. Co., 47 N. Y. 157, 161, 162; Severin v. Cole, 38 Iowa, 463; Gerrard v. Omaha, N. & B. H. R. Co., 14 Neb. 270, (15 N. W. Rep. 231;) Lewis, Em. Dorn. § 335. Such a construction of the law is necessary to carry into effect its very obvious purpose; that is, of awarding compensation for the injury to the property caused by a change of the established grade. Upon what persons that injury would fall, and hence who should receive the compensation therefor, would depend upon the circumstances of each case, as respects the title, and the interests of various persons in the property. It is very likely to be some other person than the owner of the legal estate. The injury to him may be really only nominal, as where he has sold the property, and received the price, but has not yet conveyed the legal title. The purpose of the statute being to award compensation for the injury to the property, it is to be supposed that it was intended that the persons really suffering that injury should receive the compensation awarded therefor, rather than that the owner of the legal title should receive the entire damages awarded, even though the injury might affect only other persons, who alone, under the general principles of law and equity, would be entitled to whatever compensation should be allowed. It must have been intended that the general principles of law should control the determination as to who might be entitled to receive the damages awarded for the injury to the property.

Finally, the point is made that the damages awarded are to be raised by assessments upon property benefited by the alteration of the grade, and that no action will lie against the city to recover the same, at least until the money has been cóllected by the city by means of such assessments. It does not appear, unless by inference, whether or not the money has been thus collected. Assuming that this is the correct construction and effect of the law, we are still of the opinion that the circumstances of this case are such that the action is maintainable. We may accept as well founded the claim on the part of the city that, by force of section 4 of title 3 of the law above cited, the provisions of title 1 of the same chapter (prescribing, among other things, the proceedings for the condemnation of land for public use) are made applicable to proceedings for a change of street grades. Section 18 of the latter title provides that the city shall not “enter upon, take possession of, and appropriate the property condemned” until the money is collected, and ready, in the hands of the treasurer, to be paid over to the parties entitled to damages for the property condemned, nor until the treasurer shall have published a notice thereof as specified. It was alleged in the complaint that the city, by its proper officers, changed the established grade, and “proceeded to grade the said streets, whereby the premises aforesaid were greatly damaged,” etc. The regrading of the street in conformity with the changed grade would be an appropriation of the property of the adjacent proprietor, the owner of the soil, unauthorized, under the law referred to, except under the conditions there prescribed. This allegation of the actual change of the grade is not effectually denied in the answer. The general and bare averment that the defendant has not knowledge or information sufficient to form a belief as to the truth of the allegations-of the complaint does not avail with respect to the alleged conduct of the defendant, concerning which, presumably, it must have knowledge. Hence we take the alleged fact to be undisputed. The city, having thus appropriated the property, by actually changing the grade on the ground, should be deemed to have waived its right to postpone the payment of the damages until it should have collected the funds by means of special assessments, and to have elected to become immediately responsible.

Order affirmed.

(Opinion published 54 N. W. Rep. 370.)